Is a warranty still valid if the company that issued it is sold?

A well known TX pool company gets into trouble,so  the owner sells out to a partner. The company keeps the same name but doesn’t advise the customer base of the sell and continues to work like nothing is different. Is the existing pool company still responsible for upholding the warranties issued by the company? Does the “new” pool company assume all of the customer’s, previous to sell and after, liabilities and warranty issues?

Asked on November 29, 2010 under General Practice, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

There is no simple answer: it depends in large part on how the sale occured and whether the same corporate entity still exists. Companies can be sold in two basic ways: either the corporation itself (or the LLC) can be sold, in which case the buyer takes it subject to all contracts, agreements, and obligations; or the assets are sold but not the corporate entity, in which case the buyer only takes those obligations which he, she, or it specifically assumes (or takes on). So it may be the case that the new company has to honor the old company's warranties, but it's not a given; it depends on the circumstances.


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